tv President Obama Statement on Corporate Tax Evasion CSPAN April 5, 2016 8:09pm-8:24pm EDT
also carrie arnold will be with us to discuss her article on the controversy over school-based nutrition and bmi screenings for students. she writes about how the measures are meant to improve the health of students but some show the methods are triggering deadly eating disorders in children. watch c-span's washington journal live at 7:00 eastern wednesday morning. join the discussion. the treasury department recently took steps to prevent the practice of tax inversions where international corporations move their headquarters overseas to avoid u.s. taxes. president obama spoke today about what the federal government is doing to close the tax inversion loophole. this is 15 minutes. >> good afternoon, everyone. i'm horning in on josh's time for a hot second. as we learned last week,
america's economy added 215,000 jobs in march. that means that our business has extended the longest streak of private sector job creation on record. 73 straight months, 14.4 million new jobs, unemployment about half of what it was six years ago. this progress is due directly to the grit and determination and hard work and the fundamental optimism of the american people. as i travel around the country, what stands out is the fact that the overwhelming majority of folks work hard and they play by the rules. and they deserve to see their hard work rewarded. they also deserve to know that big corporations aren't playing by a different set of rules. that the wealthiest among us aren't able to gain the system. that's why i've been pureeing
for ye pushing for years to eliminate injustices in our tax system. so i'm very pleased the treasury department has taken action to prevent corporations from taking advantage of one of the most insidious tax loopholes out there in fleeing the country just to get out of paying their taxes. this got some attention in the business press yesterday. but i wanted to make sure that we highlighted the importance of treasury's action and why it did what it did. this directly goes at what's called corporate inversions. they are not new. simply put, in layman's terms, it's when big corporations acquire small companies and change their address to another country on paper in order to get out of paying their fair share of taxes here at home. as a practical matter, they keep most of the actual business here in the united states because they benefit from american infrastructure and technology and rule of law. they benefit from our research
and our development and our patents. they benefit from american workers who are the best in the world. but they effectively renounce their citizenship. they declare that they are based somewhere else thereby getting all the rewards of being an american company without fulfilling the responsibilities to pay their taxes the way everybody else is supposed to pay them. when companies exploit loopholes like this, it makes it harder to invest in the things that are going to keep america's economy going strong for future generations. it sticks the rest of us with the tab. and it makes hard working americans feel like the deck is stacked against them. so this is something that i have been pushing for a long time. since i became president, we have made our tax code fairer. we have taken steps to make sure our tax laws are enforced, including leading efforts to crack down on offshore evasion. i will say it gets tougher sometimes when the irs is
starved for resources and squeezed by the congressional appropriation process so that there are not enough people to pay attention to what all the lawyers and account ant account doing all the time. we have continued to emphasize the importance of basic tax enforcement. in the news over the last couple of days, we have had another reminder in this big dump of data coming out of panama that tax avoidance is a big global problem. it's not unique to other countries because, frankly, there are phone there are folks taking advantage of that. a lot of it is legal. that's the problem. it's not they are breaking the law. the laws are so poorly designed that they allow people, if they have got enough lawyers and enough accountants, to wiggle out of responsibilities that ordinary citizens are having to abide by. here in the united states, there are loopholes that only wealthy
individuals and powerful corporations have access to. they have access to offshore accounts, and they are gaming the system. middle class families are not in the same position to do this. in fact, a lot of the loopholes come at the expense of middle class families because that lost revenue has to be made up somewhere. alternatively, it means that we're not investing as much as we should in schools, in making college more affordable, in putting people back to work, rebuilding our roads, our bridges, our infrastructure, creating more opportunities for our children. so this is important stuff. and these new actions by the treasury department build on steps that we have taken to make the system fairer. but i want to be clear. while the treasury department actions will make it more difficult and less lucrative for companies to exploit this particular corporate inversions loophole, only congress can close it for good.
and only congress can make sure that all the other loopholes that are being taken advantage of are closed. i have often said the best way to end this kind of irresponsible behavior is with tax reform that lowers the corporate tax rate, closes wasteful loopholes, simplifies the tax code for everybody. in recent years i put forward plans repeatedly that would make our tax system more competitive for all businesses, including small businesses. so far, republicans in congress have yet to act. my hope is that they start getting serious about it. when politicians perpetuate a system that favors the wealthy at the expense of the middle class, it's not surprising that people feel like they can't get ahead. it's not surprising that often times it may produce politics that is directed at that frustration. rather than doubling down on
policies that let a few big corporations or the wealthiest among us play by their own rules, we should keep building an economy where everybody has a fair shot and everybody plays by the same rules. rather than protect wasteful tafl loopho tax loopholes, we should invest in education and education and job training that we know grow the economy. rather than lock in tax breaks for millionaires and make it harder to actually enforce existing laws, let's give tax breaks to help working families pay for childcare or for college. let's stop rewarding companies that are shipping johns overseas and profit overseas and start rewarding companies that create jobs right here at home and are good corporate citizens. that's how we're going to build america together. that's how we battled back from this great recession. that's the story of these past seven years. that can be the story for the next several decades if we make the right decisions right now.
so i hope this topic ends up being introduced in the broader political debate that we're going to be having leading up to election season. okay? with that, i turn it over to mr. josh earnest. >> a question, mr. president. given that the release of these millions of pages of financial information, are you concerned that that reflects on the ability of the treasury department to sort of be able to see all the financial transactions across the globe? they didn't see these. whether that suggests that the sanctions regime that you put in place in bunches around the world might not be as strong as you think it is? >> we know the sanctions regime is strong, because iran wouldn't have, for example, cut a deal to end their nuclear program in the absence of strong sanctions enforcement. but there is no doubt that the problem of global tax avoidance generally is a huge problem.
it has been brought up in g-7 meetings, it has been brought up in g-20 meetings. there has been some progress made in coordinating between tax authorities of different countries so that we can make sure that we're catching some of the most egregious examples. but as i said before, one of the big problems that we have, michael, is that a lot of this stuff is legal, not illegal. and unless the united states and other countries lead by example in closing some of these loopholes and provisions, then in many cases you can trace what's taking place but you can't stop it. and there's always going to be some illicit movement of funds around the world. but we shouldn't make it easy. we shouldn't make it legal to engage in transactions just to avoid taxes. and that's why i think it is
important that treasury acted on something that's different from what happened in panama. the corporate inversions issue is a financial transaction that is brokered among major for tjo 500 companies to avoid paying taxes. the basic principal that everybody pays their fair share and we don't have people taking advantage of tax provisions, that's something that we really have to pay attention to, because as i said, this is all net outflow of money that could be spent on the pressing needs here in the united states and the volume that you start seeing when you combine legal tax avoidance with illicit tax avoidance or some of the activities that we're seeing, you know, this is not just billions of dollars, it's not even just hundreds of billions
of dollars. estimates are this may be trillions of dollars worldwide. it could make a big difference in terms what we can do here. i'm going to take one more question. then i will turn it or to josh. one last one. >> mr. president, the republican front runner outlined his plan to -- >> oh, no. >> what would be the real implication of this plan? are his foreign policy proposals doing damage to the u.s. relations abroad? >> the answer to the latter question is yes. i think that i have been very clear earlier that i am getting questions constantly from foreign leaders about some of the whackier suggestions that are being made. i do have to emphasize that it's not just mr. trump's proposals. i mean, you are also hearing concerns about mr. cruz's
proposals which in some ways are just as draconian when it comes to immigration, for example. the implications with respect to ending remittances, many of which are from legal immigrants and from individuals who are sending money back to their families, are enormous. first of all, they are impractical. we just talked about the difficulties of trying to enforce huge outflows of capital. the notion that we're going to track every western union bit of money that's being sent to mexico -- good luck with that. then we've got the issue of the implications for the mexican economy. which in turn if it's collapsing actually sends more immigrants north because they can't find jobs back in mexico. but this is just one more example of something that is not thought through and is put forward for political consumption.
as i tried to emphasize throughout, we've got serious problems here. we've got big issues around the world. people expect the president of the united states and the elected officials in this country to treat these problems seriously, to put forward policies that have been examined, analyzed, are effective, where unintended consequences are taken into account. they don't expect half baked notions coming out of the white house. we can't afford that. all right? turn it over to josh. thank you guys. our c-span campaign 2016 bus continues to make stops around the country visiting winners from this year's studentcam competition. we visited phoenix to present winners from the west division.
the classmates won second prize for their video on gender wage inequity in the workplace. then our bus stopped in los angeles for a ceremony for the third prize winner before heading to elk grove and rockland to present winners in those areas with awards. c-span extends a special thanks to cox, time warner cable and c comcast in helping in coordinating the visits in the community. watch one of the top 21 winning entries at 6:50 a.m. eastern before washington journal. the former google executive enlisted by the white house to fix the problems in government information systems. from the computer history